Hot Stock Pos surges after news on special dividends

by **Cals** Fri 06 Sep 2013, 16:09

Hot Stock Pos surges after news on special dividends
Business & Markets 2013
Written by Cynthia Blemin of theedgemalaysia.com
Friday, 06 September 2013 13:23

KUALA LUMPUR (Sept 6): POS MALAYSIA BHD [] saw its share jump as much as 3.6% in active trades, after news of possible pay-out of special dividends and bonus for shareholders by the company.

At 12.30 pm noon break today, shares of the country’s postal service rose 9 sen or 2% to end at RM5.08, after hitting a high of RM5.17 per share earlier. In morning trades, it was one of the top 10 gainers.

Pos Malaysia’s chairman Tan Sri Mohd Khamil Jamil was quoted by the media yesterday as saying that the company was exploring possibilities for shareholders to enjoy the benefits of the group’s tax credits.

It has been widely speculated that the special dividend might be 59 sen per share.

HwangDBS Vickers Research, in a note today, said the announcement could result in higher and/or special dividends.

“We believe a special payout is possible given its net cash of RM1.23/share as at end-June 2013, and strong recurring cash flow from its core businesses,” said HwangDBS.

It noted that the group’s Section 108 tax credits amount to RM215 million or RM0.40/share as at March 2013, and will expire by end-2013.

The research house has maintained a “buy” rating on the stock and target price of RM5.60.

“We continue to like the stock for its solid growth opportunities, strong balance sheet and favorable ROEs (18-20%),” HwangDBS said.

SJ Securities’ senior remisier Goh Kay Chong told theedgemalaysia.com that the buying of Pos today could be due to new reports today.

He noted that Pos Malaysia’s shares had gone up to as high as RM5.23 on August 15, 2013, and hence investors feel it might be possible for the share to rise further and make profits.

However, he cautioned that institutional investors might sell after making profits.

“They (institutional investors) got in to pick up the shares (Pos Malaysia) last year when the price was low at RM2.94 on November 26, 2012. And they started selling when the stock went up to RM3.73 on January 14, this year,” he elaborated.